Auspice enters ETF market with crude-oil fund

Morningstar Canada 12 May, 2015 | 5:00PM
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Auspice Capital Advisors Ltd. today joined the growing number of providers of exchange-traded funds in Canada with the launch of Canadian Crude Oil Index (CCX) on the Toronto Stock Exchange.

The ETF seeks to replicate the performance of the Canadian Crude Excess Return Index, developed by Auspice to be a benchmark for the price of oil produced in Canada. The crude-oil index price represents a rolling three-month exposure, which Auspice said is intended to improve liquidity, lower transaction costs and reduce the effects of contango and backwardation.

Tim Pickering, president and chief investment officer of Calgary-based Auspice, said the ETF lets investors participate in the Canadian crude-oil market in a pure way, rather than by buying the stocks of oil producers.

"The Canadian Crude Index gives investors a tool to better understand the price of Canadian crude that simply did not exist before," Pickering said in a release. "West Texas Intermediate is not an accurate measure of the price of Canadian oil, yet is the one that is most commonly referenced in Canada. This index is a transparent, liquid benchmark that may increase the number of investors participating in Canadian crude."

The management fee is 0.65%, which does not include operating expenses. In addition, according to the prospectus, Auspice has the discretion to charge a redemption fee of 0.25%.

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